Dogecoin is out; bitcoin diamond is in. So go the rules of the S&P’s new benchmark for the crypto sector.
CoinDesk obtained a list of the 243 digital assets in the S&P Cryptocurrency Broad Digital Market (BDM) Index. A cursory analysis found that Wall Street’s latest attempt to measure returns from the “broad investable universe” ventured to crypto’s outermost rings.
An eclectic mix of name-brand blockchains and lesser-known protocols are included in S&P’s BDM. Weighted according to the index-maker’s rulebook, the coins’ collective returns crunch down to a point-based performance figure. That figure hovered around 2,676 at press time, down 14% for the month of July.
For comparison, S&P’s bitcoin tracker showed it down 450.86 points, or 11.5%, in the same time period.
BDM certainly featured bitcoin and its end-of-June market cap of over $650 billion. But the index, whose average market cap was $4.8 billion according to S&P, largely consisted of small- and mid-cap cryptos whose stories are unknown to the average banker.
One such token is skycoin, a $15 million small-cap with about $387,000 in trading volume. CoinGecko ranked it in the 660 neighborhood by valuation. In November 2018, now-deceased crypto iconoclast John McAfee had the coin’s logo tattooed on his back.
The index snubs some notable coins. XRP does not make the cut. Neither does monero or BSV.
That might be a result of S&P’s inclusion policies. The committee overseeing BDM can nix a coin that “may be an unregistered security,” that has “privacy features” or that faces “potential market disruption,” according to governance documents.
But dogecoin, the bitcoin spin-off that best encapsulated the zany boom times of memecoin season, is nowhere on the list.
“It’s because they don’t have a white paper,” a source familiar with the selection process told CoinDesk.